Desperate For New Label Deals, Spotify Reverses Position And Will Allow Release Windowing [Report]

Spotify is ready to allow new releases to be windowed on its paid Premium service. The music streamer needs new contracts with the major labels before it can move forward with an IPO; and reversing its long and strong anti-windowing policy has reportedly become part of the negotiations, according to a new report.

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Reversing its strong position, Spotify has signaled a willingness to offer paid premium users access to select new releases prior to availability on its free ad supported tier.

Paid music services return a much higher per stream rate than freemium tiers. That's led some artists including Taylor Swift, Cold Play, The Black Keys and Adele to keep their new music off of streaming services that do not allow so-called "windowing" on paid-only tiers.

"It's pretty hostile to punish

your best customers and fans."

Spotify has long been a strong opponent of windowing, with execs calling the practice a "hostile proposition... It's pretty hostile to punish your best customers and fans. We think it's a wrongheaded approach," said one senior Spotify exec, adding "there's certainly no data whatsoever to suggest that this increases unit sales."

But the music streamer has been out of contract with all three major labels for several months, operating on a month-to-month license. In an effort to make a deal, which Spotify desperately needs before it can launch an IPO, CEO Daniel Ek signalled a willingness to reverse course on windowing.

“There is mounting pressure from artists and labels. There is not going to be an IPO unless they have deals,” said one source close to the talks told the New York Post.

“There are two things being discussed - windowing and rates. It’s a bit of ‘we’ll compromise if you compromise,’ ” said a Post source familiar with talks. “They’re tech people and they want to get rich. They’re being pragmatic about how they get there.”